"You know, we think of experts as experts and we should follow the experts. And yes, that is sometimes correct. But there should be a layer between that expertise and the decision making." — Patrick Huey, author, History Lessons for the Modern Investor
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Curt Mercadante and Patrick Huey discusses how social media distractions impact our financial decisions, and how the importance of adding a layer of critical thinking between ourselves and popular “experts” who give harmful advice.
This episode is taken from our longer discussion with Patrick.
Patrick is the owner of Victory Independent Planning, LLC., as well as the author of History Lessons for the Modern Investor and The Seven Pillars of (Financial) Wisdom.
He is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Advisor in Philanthropy® and an Accredited Tax Preparer. Patrick earned a Bachelor’s degree in History from the University of Pittsburgh, and a Master of Business Administration from Arizona State University.
Lieutenant Huey served as a Naval Flight Officer from 1996-2005 earning the Strike Fighter Air Medal during combat operations and two Navy Achievement Medals. He enjoys travel, golf, tennis and spending time with his wife Dixie and their son Fletcher.
FULL RAW TRANSCRIPT OF THIS EPISODE:
Curt Mercadante: Yeah. And one of the things you've written about a lot, um, and it, we just had Jason Gregory on the shows and Eastern philosopher, and he has a new book called spiritual freedom in the digital age and, and talks about how the constant attention and addiction to screens is just messing with our, our minds.
And I think it's important to realize there's always been when you go 2,500 years ago. Gosh, even if you, if you really look at what the gospel, even what Jesus was saying, or you look at what lotsa was saying, right. Or certainly the Stoics there's always been pleasures to distract. Um, and even back then, there's, there is a wonderful, uh, pieces of wisdom in.
Turning it off. They didn't have a screen back then, but they had other things, they had wine, they had, uh, you know, drink. They had a well in the, you know, the, the Epicureans right. Had food and, and the others and, and the, and the orgies or whatever it is. Right. Yeah. And now we have, that would be distracted.
Yes, yes, yes, yes. There's one going on right here. I'm trying to figure it out. Uh, the, I won't turn around the camera, but yeah, it's, it's, it's the. Um, now we have an orgy of information coming at us. And one of the things that Jason writes about and we talked about in our interview, and one of the things that you've written about is the fact that our mind is not evolved or equipped or built to deal with that constant stream of information, which now I think there's more in a day or an hour than the average human ever had in a lifetime before.
And so it I'd love to get your take on this. At the very beginning of the era that we're currently in, whatever we want to call it in pandemic era, I had two economists. Uh, well, one was an economist at O at Duquesne, near Pittsburgh and university. And the other guy is that here in Arizona, he's more of a political science guy to come at it from a freedom point of view.
And they were saying, oh, we talked about the danger with experts and trusting experts. So on the one hand, we have democratization of data and news and information coming at us. On the other hand that requires us to have a brain that's equipped to parse it out and make sense of it on our own. So it's almost as if we have to increasing rely on experts to parse the data, which brings us back to the same problem we talked about with statistics at the beginning.
So, so the average person investor, and you've talked about, you know, the millionaire next door, the person, you know, people hire you, not because they're. Because they need someone to be the expert for them. What do you say to someone who's like, I don't know who to trust anymore. I don't trust anyone, but I, I, I don't, I don't trust myself either.
So how do you, how do you counsel someone like that?
Patrick Huey: Uh, it's interesting because, um, I I'm, I'm blanking on the name of the author, the first name anyway, his last name is Epstein. Uh, but not, there you go. Yeah. And the focus of the book is called brain. Okay. Uh, and he talks exactly about what you're talking about, how, uh, experts can very often have these types of cognitive biases that work that we're discussing, but they can be worse than the average person.
I mean, think about somebody who's been in academia for 30 years, they have a specialty and then you come to them and say, well, we found this. Their immediate reaction is going to be no, no, no, no, no. I'm the expert, you know, I I've seen this for the last 30 years. In fact, they did a study, uh, on, uh, intelligence, um, estimates, um, and this appears in his book and basically they had all these, you know, uh, I think it was pre Soviet union, uh, brief the fall of the Soviet union and they had all these intelligence experts coming in.
Give their predictions for what was going to be going on in five or 10 years. And then they had a group of kind of regular people come in, listen to all the experts, distill that information and then say what they thought was going to happen. And every single time, the group of non-experts was closer to the mark than the experts.
Why is that again? It's these mental biases that if you don't, if you're not aware of them, I don't care what you're an expert in. If you're not an expert in. How your brain works, you're going to fall, fall into that trap and you're gonna fall into it consistently. And you're going to pound the table and say, no, no, no, no, no, I'm right.
And you're wrong. And the more you say it and we're going to believe it. So it's, it's this insidious, you know, thing that we think of experts as experts and we should follow the experts. And yes, that is sometimes correct. But there should be a layer between that expertise and the decision making. And that's honestly what I try to give my clients, you know, I, I'm an expert in some things, but I'm really a Jack of all trades.
Right. And you see, I've got three different designations. Um, I work in taxation. I work in and I know that's a, it's a tough place to be. You're, you're absolutely correct. I work in taxation. I work in investing. I work with gifting. Uh, you know, I work with, with financial planning and retaining. But I want to be the person who's listening to the experts, distilling what they're saying, and then bringing it in to my clients.
And that's where I think I fit in. And that's where I think we should all strive to fit in. Uh, if we're working with, with clientele,
Curt Mercadante: I was thinking about this yesterday. Um, just because there's a number of people. I know, uh, clients and family members who have literally almost been killed. MDs by doctors over the last year in terms of prescribing the wrong medications.
And it was just a complete, it was, it was a mistake. It wasn't like, oh, it literally was a mistake. Um, and some other advice. And I was thinking about this yesterday that, uh, I don't know, things pop into my head every once in a while. And it was like, I want a creative doctor versus a smart dog. Correct. And does that kind of go along the lines of what I was saying that in March, 2022, please give me someone with creativity versus someone who can just spew out data or yeah.
Um, is that, is that kind of what we're talking about here?
Patrick Huey: I think so. I think you've got to have some latitude to make decisions. Uh, I think that, uh, you know, you're gonna, you're gonna take me down a path here. There'll be interesting, but, uh, you know, I think you're right. I think medicine, and I've heard, I've heard doctors say this medicine has gone the route of checklists, right?
So you come in, you have this, we do this workup. We go to this, we send you to this specialist, they do this workup. They've sent. And you keep, I'm going through this with, you know, with family, uh, now as well, where you just have this circular pattern of, of a lots being done, but not a whole lot's being accomplished.
Um, so yeah, I would want somebody who's, uh, got some latitude to make decisions. I would want somebody who takes inputs from a lot of different places, somebody who reads the studies, um, and incorporates that into their practice. Those are far and few between, I think anybody who's seen a primary care physician in the last 20 years has seen the way it's changed.
Um, unfortunately for them they're, they're on a clock, you know, they only have so much time to spend with individual patients. Um, and I know from my own experience that that's not good. Uh, you know, you've got to be willing to spend the time with people in order to, to get to the bottom of their finances.
How are you going to get to the bottom of the human body in seven or eight minutes? It's just, it's not possible. So yeah, I think you're, you're spot on. I think that expertise is out there for a reason. Uh, but. Yeah.
Curt Mercadante: And when you were talking about the experts versus the, uh, you know, people, uh, the non-experts perform better, uh, two things came to mind.
One is, you know, Elon Musk and rocket ships, you know, and there's this host of, I don't know if it was buzz Aldrin, but this host of astronauts and rocket, you know, experts. And, and I think it was 60 minutes where Elon broke down crying saying, you know, yeah. It hurts me that they came out saying I'm a threat.
Right. And yet now he's the. Right. Does it, does it, does it, is it simply a matter of courage and then time courage on behalf of the non-expert to just keep forging and proving his or herself, and then time, once everyone sees that they shift from, oh wait, forget the experts. Now Elon's the expert because it can be frustrating.
Right? When we talk about health, right. Medicine, if you're the person who's a little more aware, But the person with the health problem is getting the crappy advice and you're standing there frustrated, but that person is, so you talked about anchoring and programming is so no, no. I got to listen to the doctor.
I got to listen to the doctor. I got to listen to the doctor and you're like, but I can see it. You know, what does it, what does it take for that to break through? I mean, in the financial realm, you know, there's, I mean, right now we're dealing with a crypto, you know, part of me is like, Hey, maybe with everything going on in the world.
Maybe, maybe, maybe, but there's also a part of me, like. That's new. I don't trust it. What the heck? You know,
Patrick Huey: there, there's also, uh, you know what I think of when you're talking about those things is the pandemic that's been going on really since the seventies in the United States. Um, and that is, uh, obesity and diabetes.
Um, what are the experts tell you? They tell you that eat a high carbohydrate diet, uh, and a bunch of small meals during. What's that worked out for us, you know, how, how are we doing, you know, 40 years into that experience experiment. I can tell you from going to the beach, uh, and from going through airports all over the country, it's not going well.
Um, you know, it's, uh, it's bad advice, um, and you can break that down. There's a great book by Nina Teicholz, uh, called the big fat surprise that breaks down why that all happened. Going back to the fifties. And, uh, I think that it was once again, it was an expert who got very attached to his ideas and random through, uh, to the point of, you know, now that is federal policy.
That's how they feed our kids in school. That's how they feed our military. Um, and in fact, doesn't give you the heebie-jeebies, it, it really.
Curt Mercadante: Yeah, it, uh, and yet all the data in the world from people who say they trust the data, all the data in the world. Won't, I mean, there's people who will follow the experts off a cliff for, um, health wise, which is obviously dangerous.
And we're seeing that, but financially wise as well.